RESPs

Prepare for your children’s pursuit of a higher education. Plan for their future now!


Types of RESPs

Individual Plan – only one beneficiary - no relationship requirement with subscriber(s)

Family Plan – one or more beneficiaries - each beneficiary must be connected to each subscriber by blood relationship (as defined in the Income Tax Act) or adoption


Beneficiary
  • Individuals must have a Social Insurance Number and be a Canadian resident
  • In an Individual Plan, beneficiary can be anyone, including the subscriber
  • In a Family Plan, each beneficiary must be connected to each subscriber by blood relationship or adoption and must be under 21 when entered into the plan
  • Only certain beneficiaries are eligible to replace another beneficiary in a Family Plan; The same rules apply to the Individual Plan in order to avoid tax and CESG implications
Subscriber
  • Can have one or two subscribers;  joint subscribers must be spouse/common-law partner
  • Must have a Social Insurance Number
  • In an Individual Plan, subscriber can be anyone, including the beneficiary
  • In a Family Plan, each subscriber must be related to each beneficiary by blood relationship or adoption
  • Can be a public primary caregiver, ie: the department, agency or institution that cares for the beneficiary or the public trustee or public curator of the province in which the beneficiary resides
Contributions
  • No annual limit for annual contributions
  • Lifetime maximum contributions to all RESPs per beneficiary is $50,000.00 (excess contributions are not permitted and subject to penalty)
  • Contributions are not tax deductible; however earnings are tax sheltered until withdrawn
  • Excess contributions which did not attract CESG in the year cannot be carried forward to attract CESG in a subsequent year
Canada Education Savings Grant
  • A great incentive to save
  • 20% on the contribution amount each year on the first $2,500.00
  • Depending on family income a child could receive additional grant on contributions.
  • Lifetime CESG maximum, per beneficiary, is $7,200.00
  • CESG payments do not affect the annual and lifetime RESP contribution limits
  • For the most up to date information and changes, click here
 Eligibility for Grant
  • Contributions must be made prior to the end of the year the beneficiary attains age 17 and the beneficiary must be a resident of Canada and have a Social Insurance Number
  • RESP beneficiaries age 16 or 17 years are eligible only if: 
    • a minimum of $2,000.00 RESP contributions have been made and not withdrawn for that beneficiary before the end of the year the beneficiary attains 15 years, OR
    • a minimum of $100.00 in annual contributions have been made and not withdrawn for that beneficiary in any 4 years before the end of the year the beneficiary attains 15 years
It is important to note that there are situations where the grant would have to be repaid. Contact us for full details.

Educational Assistance Payments (EAP)
  • It is intended that all earnings in the RESP, as well as the CESG received, will be used for education-related costs at a qualifying post-secondary educational institution
  • Earnings are sheltered from tax while in the RESP Plan; Both earnings and CESG will be taxable when withdrawn by the Beneficiary
  • Withdrawal requests for EAPs must be accompanied by proof of enrolment in an approved education program
  • EAPs are limited to $5,000.00 (grant and income payments) in the first 13 consecutive weeks in a qualifying educational program. After the student has completed 13 consecutive weeks, there is no limit on the amount of EAP's that can be paid if the student continues to qualify to receive them.
Investment Options
  • New Plan - minimum deposit - $500.00
  • Subsequent Lump Sum Deposits:
    • Fixed Term - $500.00
    • Variable Rate - for weekly or semi-monthly electronic deposits, the minimum is $25.00 for one time subsequent deposit to existing plan. (Quarterly, semi-annual, annual minimum is $100.00)
  • Annual statements